Is an Unsigned Contract Binding? President Trump Will Want to Know

After President Trump was elected there are many things we now consider normal would be scandalous in the past. But as the political and social winds blow contract law is much more steady, though legal decisions may zig zag as the facts require.
In case you haven’t heard Pres. Trump is famous for extramarital affairs. He’s openly admitted them and written about them in his books. Melania Trump is his third wife. They had an affair while he was married to his second wife, Marla Maples. He had an affair with her while he was married to his first wife, Ivana Zelnickova. There’s currently a very public dispute over a non-disclosure agreement involving porn star Stephanie Clifford (aka Stormy Daniels) and what appears to be Donald Trump.

According to Clifford they engaged in a sexual relationship while Trump was married to Melania Trump and pregnant with their son. It appears that this agreement, or attempted agreement, depending on who you believe, was partially signed just days before the 2016 election. Clifford states she was paid $130,000 in exchange for the agreement. Trump’s attorney, Michael Cohen, claims he paid the money, not the President, who denies an affair took place or he’s involved in the agreement.

Clifford recently went on a public relations tour discussing the affair, then denied it took place, then stated there was an affair. Apparently Cohen started an arbitration proceeding to enforce the agreement, prevent Clifford from disclosing details or filing any related lawsuits. He claims the arbitration outcome was in his favor, according to Fox News.

Clifford’s attorney, Michael Avenatti, claimed the arbitration process was a sham and filed a lawsuit in state court in Los Angeles seeking a legal judgement that the non-disclosure agreement is not binding or valid because Pres. Trump, the one who was supposed to pay the money, never signed it (though Clifford did).

The non-disclosure agreement is attached to the complaint and as you can see it’s so confidential the parties are given code names. Peggy Peterson is Stephanie Clifford/Stormy Daniels, David Dennison is supposedly Donald Trump and Essential Consultants, LLC, is reportedly an entity created to hide the fact Trump is paying Clifford. If you go to the end of the documents you’ll find blank the signature space for David Dennison and his attorney.

The more formal the contract, the easier it would be to enforce. If a written contract is signed and witnessed, it would be hard to deny its existence. It should contain all the material terms of the agreement and show that both parties exchanged something of value.

For a contract to be valid both parties must consent to be bound by it. There needs to be a “meeting of the minds” by the parties as to the terms of the contract and its acceptance. Under California law a written but unsigned contract can be binding if the parties act as if the contract was finalized. Those actions are seen as evidence of the parties accepting the contract.
In this case, until recently, Clifford acted in accordance to the agreement and didn’t disclose the issue after she signed it. Her attorney did receive payment. But Avenatti can argue Pres. Trump hasn’t acted as if the agreement was finalized. Not only didn’t he sign it, he denied its existence and didn’t pay the settlement. If this matter goes forward potentially there could be discovery in the matter to find out whether the President in fact is a party to the contract.

If you’re involved in contract negotiations but it hasn’t been finalized you may want to act as if there is no contract or possibly, like Clifford, you’ll learn you’re bound by its terms.